Trudeau: Canada won't back down from demands for new NAFTA

Irving Hamilton
September 21, 2018

Sources say Thursday's talks between Foreign Affairs Minister Chrystia Freeland and US trade ambassador Robert Lighthizer were dominated by efforts to secure a commitment from the Americans that a new NAFTA deal would mitigate the risk of such tariffs.

In a letter sent to Foreign Affairs Minister Chrystia Freeland last Friday, Perry Bellegarde said that excluding the chapter - created to recognize and protect inherent and treaty rights - would be a "lost opportunity" for the country and for efforts on economic reconciliation with First Nations.

Freeland spokesperson Adam Austen said the Liberals still believe in the principles outlined at the beginning of negotiations, but he wouldn't provide any details on the fate of the Indigenous chapter because the minister and USA trade czar Robert Lighthizer have agreed not speak public about the specifics of talks.

Market fears over the future of the 1994 pact, which underscores $1.2 trillion in trade, have been regularly hitting stocks in all three nations, whose economies are now highly integrated.

The U.S. and Canada have been working towards finding common ground on reflecting the rights of Indigenous people and women in a renewed NAFTA, but sources with knowledge of the talks say distinct chapters on each fell off the table earlier this year. Asked whether time was running out, Freeland said her focus was getting a deal that was good for Canadians.

Then there's the U.S. -Mexico agreement in principle that Trump and outgoing Mexican counterpart Enrique Pena Nieto announced last month, to the surprise of the Canadian team. He also warned of tariffs on Canadian autos exports.

Trump came to power a year ago vowing to tear up NAFTA unless major changes were made to a pact he blames for the loss of US manufacturing jobs.

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FILE PHOTO: Canada's Prime Minister Justin Trudeau takes part in an interview at the National Arts Centre in Ottawa, Ontario, Canada, September 17, 2018.

Elements from a proposed Indigenous chapter "could be moved to other chapters" of the agreement, Bellegarde said in his letter - an alternative approach being explored, according to sources who spoke to The Canadian Press under condition of anonymity given the sensitivity of talks. It doesn't make a stitch of sense. "We are a small nation, we're not a stupid nation", added Dias.

Freeland said she would return to Canada on Thursday ahead of a two-day meeting of female foreign ministers she is co-hosting in Montreal. Next week she will be in NY for a United Nations session.

The Globe and Mail newspaper on Thursday reported that USA negotiators want Ottawa to agree to capping its auto exports to the United States at 1.7 million vehicles a year, something that Canadian industry sources dismissed as unacceptable.

There have been signs of progress, including word Wednesday that the US had backed off in recent weeks on its desire to limit Canadian and Mexican firms from bidding on lucrative American procurement projects.

"It may have been a better strategic move to negotiate Section 232 separately, eliminating a Canadian "ask" from the negotiations so as not to add to the USA leverage, but the risks of continued threats of 10 or 25 per cent are too large", Pearson said.

WASHINGTON-Canada and the USA are still unable to resolve their NAFTA differences.

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